June 2021 saw 31 haulage firm insolvencies, the highest in a single month since January 2019 as Brexit and driver shortages bite, according to data from Tower Bridge-based audit firm Mazars that was shared exclusively with City A.M. this afternoon.
The fall in shipments between the UK and EU and between Great Britain and Northern Ireland since Brexit has seen revenues fall for some logistics businesses that relied on cross-border trade.
Hauliers have suffered as fewer shipments have been made across borders due to the additional red tape and costs of doing business with the EU.
Driver shortages are another key factor in the industry’s problems.
Covid has led to a major backlog of tests for new drivers – 28,000 as of May this year – while the recent ‘pingdemic’ has caused many drivers to self-isolate.
The issue has been exacerbated by Brexit, with many drivers from EU countries returning home, a figure which research suggests could be as high as 15,000, according to research by Driver Require.
Logistics companies must also grapple with the fact that HGV drivers do not count as ‘skilled’ workers under the government’s points-based immigration system, making it practically impossible to recruit from abroad.
“Brexit has hit the logistics industry very hard. Combined with the effects of the pandemic, we’re starting to see an acceleration in haulage companies going out of business,” Rebecca Dacre, partner at Mazars, told City A.M. this afternoon.
“Even companies that have escaped the worst effects of Brexit on the industry are struggling to find the drivers they need,” she added, urging the Government should consider putting in place measures to ease the driver shortage in the short term.
“Perhaps by creating a special visa category for HGV drivers, otherwise we will see more hauliers go out of business and difficulties in the supply chain will impact everyone,” Dacre concluded.